COVID-19 claims weigh on WR Berkley's first quarter results
Property/casualty insurer WR Berkley reported a $4.4 million net loss in the first quarter of 2020 as it experienced the preliminary effect of the global COVID-19 pandemic.
The company posted a net loss of $4.4 million in the first quarter, compared with a $180.7 million net income a year ago.
Catastrophe losses for the quarter included an approximate $65 million preliminary provision for COVID-19 related claims activity.
The accident year combined ratio excluding catastrophe losses was 91.9 percent. The reported combined ratio was 96.9 percent. Catastrophes added 5.2 loss ratio points to the reported combined ratio, including a preliminary provision of 3.9 loss ratio points for COVID-19 related losses.
The gross premiums written increased by 9 percent to $2.23 billion, compared with $2.05 billion in Q1 2019.
"The global COVID-19 pandemic had an adverse impact on first-quarter net income. Still, our operating fundamentals remained strong," the company said in a statement. "We continue to monitor the rapidly evolving legal and regulatory environment and the potential impact it will have on our industry."
The company said that additional rate increases were necessary to "recognise loss cost trends that have come into focus over the last several quarters."
"While unrealized losses had an adverse impact on first-quarter profits, investment income from the fixed-maturity investment portfolio was in line with our expectations. With an average duration of less than three years, this portfolio’s high-quality AA- average rating should continue to hold us in good stead even in these tumultuous times. Income from investment funds was strong as results are reported on a quarter lag. Our cash flow from operations remained healthy and we maintain significant liquidity."
